21 October 2009F.No.157/2/2003 CX.4Government of IndiaMinistry of Finance & Company AffairsDepartment of RevenueCentral Board of Excise & Customs

Subject:- Using a wrong accounting Code for payment of Service Tax clarification- Regarding.

I am directed to say that a representation had been received by the Board raising apprehensions regarding using wrong Accounting Code for payment of Service Tax. Whether, amounts to having paid the Service Tax or not.

2. The Board has examined the issue. In this connection, I am directed to clarify that the assessee need not be asked to pay the service tax again. In such cased the matter should be sorted with the P.A.O. As regards to the cases where the assessee was asked to pay service tax again, the amount thus paid may be refunded by the concerned divisional Asst. Commissioner/Deputy Commissioner.

21 October 2009Circulars are binding on authorities. There are decided cases on identical issue, issuing stricture against authorities for not adhering to CBEC's circulars.

The circular referred is reproduced. Hope it shall be of help to you.

Circular - Service Tax

Using a wrong accounting Code for payment of Service Tax clarification- Regarding.

ST Circular No. 58/7/2003 Dated, 20th May, 2003

I am directed to say that a representation had been received by the Board raising apprehensions regarding using wrong Accounting Code for payment of Service Tax. Whether, amounts to having paid the Service Tax or not.

2. The Board has examined the issue. In this connection, I am directed to clarify that the assessee need not be asked to pay the service tax again. In such cased the matter should be sorted with the P.A.O. As regards to the cases where the assessee was asked to pay service tax again, the amount thus paid may be refunded by the concerned divisional Asst. Commissioner/Deputy Commissioner.

21 October 2009Sir, as s.t. authorities informed that we should pay the sah e.cess tax again and the excess of last qtr only may be adjusted further.But for previous qtr we have to claim refund. I want to know cant we adjust old excess amount also. Or if we have to claim refund how can we claim it.

You have paid SHEC, under wrong accounting head, leading to shortfall under the head SHEC and excess in any other head. The Service Tax authorities are asking you to pay tax again under SHEC and adjust the excess in the following quarter and intimate such adjustment within 15 days of such adjustment.

There is absolutely no necessity of re payment.

There are some bank's site which does not provide facility for payment of Primary Ed. Cess & SHEC. The assessee is compeled to pay both the cess under the accounting code of the concerned service.

The perception of the authorities is unlawful and is merely a coercive method.

21 October 2009Thank u Shyam Sir, for your immediately reply. The interpretation made by you is absolutely correct. As regarding your suggestion for letter to supritendent , they claimed that it can be done for only one quarter and not for three quarters (as the mistake is for three qtrs). The amount is not so huge its 5000.00 apx for all three qtrs inclusive.In this situation wat should i do. Do i have to pay service tax again or i should go for letter writting to supritendent. Or if any other way to get it solve.

21 October 2009My suggession would be to write to the superintendent, citing provision of the law. If possible, I shall intimate the citation of the case law directly related to your case, tomorrow.

It is not the question of amount involved, but the question of law. As I have already mentioned, department has been reprimanded by higher appelate authorities for their unlawful action of demanding tax, which already stood paid, albeit under wrong accounting code.

Sattled law should not be permitted to be unsettled on the pretext of petty amount.

However, it is not uncommon to find assessees paying unlawful tax to buy peace.

"As regards the payment of education cess under separate heading, the lower authorities has not even considered the submissions made by the appeallant, in his order. It is a matter of common knowledge that the amount(i.e. Education Cess)due to the Govt. has been credited and not crediting the same underseparate heading is a technical mistake. The Board vide circular No. 58/7/2003- S.T. dated 25-05-2003 has clarified that it is a matter to be sorted out with the PAO. Despite clear cut instructions on the issue by the Board, the lower authority has blindly decided that the appeallant should pay Education Cess once again and for the same reason, he has imposed equal penalty also. The department wants to encourage voluntary tax compliance on the basis of mutual trust and the taxes are collected for noble principle of construction of nation building. But the above approach of the Adjucating Authority will not only bring distrust and scare in the mind of the assessee (appellant) but also would bring bad name to the department in particular and the Government in general. Commissioner may take this issue very serious."

28 January 2014Dear Shyam Lal Naik sir, Can you please give the detailed reference of the caseCitation : 2009 (15) S.T.R. (Commr. Appl.) you have mentioned? Please give the name of case. This decision is very important for a case i am dealing with. Thank you.